The Green Budget wishlist

Gaynor Hartnell, Renewable Energy Association Deputy Director

We are looking to the budget for clear evidence that the chasm between climate rhetoric and practical action will be closed. The UK government currently spends around £1bn per annum on its climate change mitigation programme; but the Stern report recommended spending one per cent of GDP or around £13bn per annum. Last year the International Energy Agency reinforced the Intergovernmental Panel on Climate Change estimate that avoiding ‘dangerous' climate change would cost around 5.5 per cent of GDP, equating to some £70bn per annum in the UK.

“We need firm and decisive action from government. The resource in shortest supply is time. These decisions need to be made now. We are bumping along the bottom of the EU renewables league table. We should be seeking, as a minimum, to match German levels of expenditure on climate change mitigation – in the region of £2bn per annum.”

In particular, we'd like to see the adoption of a Renewable Energy Tariff or Feed in Tariff for heat and electricity generated from renewable sources. This could work alongside the current Renewables Obligation and enabling powers could be introduced in the current Energy Bill.

We would also like to see the roll out of smart metering to all homes, beginning with a refit programme for existing buildings of 100,000 homes rising to one million per annum. This could be achieved by a £1bn recycling loan fund to allow home owners to invest in onsite generation through a second charge on their mortgage without incurring upfront capital costs. This could receive significant funding from the European Investment Bank.

The level of the duty rebate for biofuels should also set for more than the current three years to enable investors to make informed decisions.

These measures, combined with regulatory reform in the energy sector, will help put the UK on track to deliver 15 per cent renewables by 2020.

Dale Vince, managing director of Ecotricity

First and foremost I'd like to see a windfall tax on the big six [energy companies] - companies like Centrica are reporting record profits (up five fold) in a year when they've spent almost nothing building new green generation - in fact the average spend per customer from all the Big Six power companies in 2007 was about a fiver – £5.85 to be more precise.

It's a scandal that the average electricity bill contains a charge of about £14 for the Renewables Obligation cost and the RO was under delivered by almost 40 per cent in the latest period to be announced. And so consumers are paying the big six to fail to meet their minimum RO targets. In fact they pay them £14 and the big six spends a fiver.

Tax the airlines, and include them in emissions trading - end the ridiculous situation where they sit outside of every single measure to reduce emissions, stop the hand wringing and sod Michael O Leary's whinging.... (the Ryan Air dude). Also raise fuel tax, for sure – but make sure the airlines pay it too.

Planning for onshore wind might not be a budget issue or one within its scope – but I wish it was.

I'd also like to see all subsidies for bio fuels ended and the idea that bio fuels have a role to play abandoned. And while you’re at it drop co-firing from the ROC scheme.
And tax the hell out of incandescent light bulbs.

Adam Bruce, chairman of the British Wind Energy Association

The recent McKinsey report on reducing US GHG emissions refers to a range of clean tech investments that could be achieved at "negative" marginal cost – meaning that investing in them would have a positive economic return over the lifecycle of the project (generating further funds to invest in other clean tech). The UK Treasury should commission a similar report identifying the opportunities for investment in the UK - with a road map out to, and beyond 2020.

We also need investment incentives to develop the industrial infrastructure required in order to meet the EU 2020 allocation targets. The government should announce a private-public partnership to deliver the infrastructure that will underpin the 2020 targets, including ports and transport facilities.

World class research institutions such as NAREC in Blyth are attracting foreign investment on the strength of our offshore wind potential. More resources need to be channelled into Research and Development at University level, with foreign companies being encouraged to farm out their R&D and consultancy work to the UK.
We also urgently need to invest in clean tech skills and training. Schemes looking at bursaries and grants for working in the renewables sector would be welcome. We also need to look at transferable skills and how to help those wanting to switch from industries with a declining outlook (oil/coal) to those such as the renewables sector that might face a skills shortage.

With regards to microgeneration more funds are needed for micro and community renewables projects. This would be not only grant money, but would also fund an awareness programme on various generating technologies, their suitability and ways to access grants.

The introduction of a feed in tariff for micro and small renewables projects, to encourage their deployment would also be welcome

Steve Hartridge, managing director of G-Wiz supplier GoinGreen

I'd like to see a showroom tax on high polluting cars, which is used to subsidise low emission vehicles.

I'd also like to see an extension of tax benefits for the business purchase of low emission vehicles. The current 100 per cent tax break is available in the first year, but the scheme is due to end in March and should be extended.

Further improvements in road taxing are required to benefit low emission vehicles, this should be based on a yearly increase in the road tax bands to hit high polluting vehicles.

Brendan Barber, TUC General Secretary

Tomorrow, the TUC would like to hear the Chancellor say that he plans to introduce a green windfall profits tax on energy companies and that he will use the proceeds to increase spending on tackling fuel poverty and improving home insulation. This move could make a major contribution to the Government's target of eliminating fuel poverty by 2010, something which has been made more difficult by recent energy price rises that have caused problems for more than four million households in the UK.

The TUC would also like to see the Chancellor boost his green credentials by fully indexing the revenues from Air Passenger Duty (APD) against inflation, and the resulting cash allocated to stimulating green energy and green manufacturing initiatives. All of the APD revenues should be hypothecated to the proposed Environmental Transformation Fund.

Budget 2008 should also include a commitment to produce an environmental balance sheet of green taxes and expenditure. Environmental taxes fell from 3.5 per cent of GDP in 2000 to 2.9 per cent in 2005. An assessment is also needed of the implications of Stern's target for the UK - that is, one per cent of UK GDP dedicated towards climate change mitigation and adaptation policies.

Finally, the Budget should provide measures obliging suppliers to offer minimum standards of energy assistance, and the Government should be looking to identify new funding streams to boost the introduction of carbon capture and storage projects, and aim to host four of the 10 to 12 demonstration projects planned by the EU.

Simon Bullock, Friends of the Earth's economics campaigner

Alistair Darling must keep his promise to put sustainability at the heart of today's Budget. This means giving people carrots to go green, not just sticks. He must announce a wide range of measures to make it cheaper and easier for us all to go green, such as incentives on greening our homes and buying more fuel-efficient vehicles, as well as a windfall tax on energy companies to insulate people's homes and tackle fuel poverty. We need genuine Government action to tackle climate change, not more hot air.

Abandoning plans to increase fuel duty will seriously undermine the Government’s green credentials. Road transport is responsible for nearly a quarter of UK carbon dioxide emissions. The real cost of motoring has fallen under Labour, and traffic levels have risen by more than 10 per cent. The Government must do more to persuade people to drive cleaner cars and use less polluting alternatives, such as public transport.